Question:

What is a hard money HELOC?

Answer:

A hard money HELOC is used to help a customer struggling with payments on their current mortgage, but unable to refinance into a conventional loan. A hard money HELOC is used towards improving a borrower's credit score and is extended usually for a 5 or 6-year period, usually with a balloon payment at the end.

Important Features of a Hard Money HELOC

A hard money HELOC will not look at the client's FICO score, may not require full documentation, or be a no income doc.

Interest rates of a hard money HELOC vary between 10 and 12 percent, mortgage lates will be allowed, and bankruptcy and foreclosure within the last 12 months is usually accepted.

Forms required with a hard money HELOC will be a 1003, house appraisal, credit report, and lien statements.

Hard money HELOCs are designed specifically to help current borrowers struggling with foreclosure and you may consider one if you are experiencing difficulties with payments and would like to refinance, but need to repair credit first.

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